State regulators have approved the sale of Vermont’s largest telecommunications company to a private investment firm.
The Public Utility Commission has signed off on the $3.1 billion deal for Consolidated Communications to be acquired by Searchlight Capital Partners.
Searchlight is an international private equity investment company with more than $12 billion in assets.
If the deal goes through, Consolidated Communications would become a private company.
Vermont’s approval is just one small step in the transaction, which also has to be approved by federal regulators.
"We are pleased with the outcome and look forward to proceeding with fiber expansion in Vermont, which will bring 50,000 new fiber passings in 2025," said Mike Shultz, senior vice president for regulatory and public policy for Consolidated Communications. "With Vermont’s approval, Consolidated has received approval from all states in which we operate. FCC approval is expected in late fourth quarter 2024 or early first quarter 2025."
In approving the deal, Vermont’s Public Utility Commission found that the sale will allow Consolidated to access more funding as it continues building out broadband fiber across the state.
Over the past few years, the company has connected more than 105,000 homes and businesses to its high-speed fiber network, and it expects to connect up to 70,000 more customers over the next two years.
“Essentially, the transaction was about Consolidated’s acquisition by private equity, which is bringing more money into the state, which is enabling the buildout of broadband," said Ellie de Villiers, chair of the Vermont Communications Union Districts Association, which also supported the deal. "So, on balance it’s a good thing."
Essentially, the transaction was about Consolidated’s acquisition by private equity, which is bringing more money into the state, which is enabling the buildout of broadband. So, on balance it’s a good thing.Ellie de Villiers, Vermont Communications Union Districts Association
Consolidated says the deal will allow it to access an additional $380 million in new capital nationwide, some of which is expected to aid in the effort to connect more Vermont customers to high-speed broadband service.
“The Transaction will strengthen the financial health of Consolidated, providing additional capital for investments in Vermont’s fiber networks, and should not impact Consolidated’s day-to-day operations in Vermont,” the PUC wrote in its order. “The Transaction will improve Consolidated’s access to capital and aid in the buildout of improved infrastructure, including continued buildout of fiber-optic network equipment.”
The deal is not expected to result in a change of carriers for any Vermont customers, nor are there expected to be changes in services, rates, terms or conditions.
The regulatory approval came with a series of conditions.
Consolidated has failed to meet a number of baseline standards in customer service since 2019, according to the PUC order.
There has only been one quarter where Consolidated met all of its baseline service quality performance standards, the Department of Public Service said.
As part of the approval, which the PUC issued on Nov. 14, the company will have to file semi-annual reports on its staffing levels in Vermont.
The state approval is also asking for reports on how Consolidated plans to maintain Vermont’s copper network, which connects many homes to landlines.
Consolidated acquired the former Verizon telephone network when it moved into Vermont in 2017.
Even as more homes are connected to high-speed fiber for communications, people rely on landlines, especially when there are power outages.
“The Department states that one of its concerns with the Transaction and emphasis on new fiber buildouts is that the existing copper network will face further neglect and deterioration which in turn will lead to worse service quality for customers that are dependent on Consolidated,” the Department of Public Service wrote in its testimony.
Consolidated Communications provides voice, data and video communications services in 22 states, including New Hampshire, Massachusetts and Maine.
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